Intraday Investments Stalk Sheet for Friday, July 27, 2001
In overnight action, the Nasdaq Futures are 13.50 points and the S&P futures are up .90 points as of 11:45 pm edt. The big news of the evening was the massive losses reported by JDSU. Here’s an excerpt from CBS Marketwatch:
SAN JOSE, Calif. (CBS.MW) -- JDS Uniphase, the No. 1 maker of fiber-optic network gear, revealed a fourth-quarter loss of $7.9 billion late Thursday and raised its job cuts to 16,000 amid plunging demand and shrinking margins. The company said it had a full-year loss of $50.6 billion.
JDS Uniphase's shares tumbled $1.36, or 14 percent, to $8.11 in the after-hours session after climbing 68 cents to $9.47 during regular hours. The stock was worth $140.50 last July.
The San Jose, Calif.-based company said its quarterly loss was $5.99 per share, compared with a loss of $418.8 million, or 54 cents a share for the same quarter a year earlier.
JDS Uniphase's loss for the year was $46.30 a share, which includes the writing down of $44.8 billion in goodwill in the third and fourth quarters related to the purchase of SDL, E-Tak and Optical Coating Laboratory, as well as the merger of JDS Fitel and Uniphase two years ago.
JDS Uniphase's report confirmed expectations that the telecommunications gear industry and fiber-optics equipment makers in particular are likely to face more quarters of lackluster revenue and earnings growth as phone companies ratchet back their expansion plans. Nortel Networks, the world's largest telecom equipment maker, last week reported a second-quarter loss of $19.4 billion.
"We aren't surprised," said Luc Desbiens, a fund manager at Pictet & Co., which manages about $50 billion in assets worldwide. "It is still too early to get back into this sector because you need to see a rebound first in the U.S. and then in Europe. It is not even close."
It should be interesting to see how the market internalizes this news tomorrow. We fully expect to see weakness in the fiber optic sector tomorrow. We will also be looking for continued strength in the oil services sector.
Sector Model Earnings:
Companies in our sector model reporting earnings on Thursday include: ABX & UNH (to be added).
Economic Calendar:
On the economic calendar for Friday we have GDP-Adv. Q-2 (8:30 am edt), Chain Deflator-Adv. for Q-2 (8:30 am edt), University of Michigan Consumer Sentiment – Revised for July (9:45 am edt) and New Home Sales for June (10:00 am edt.). It will be interesting to see whether or not new home sales will show signs of weakness. As mentioned yesterday, home sales have remained resilient despite massive layoff announcements and weakening consumer sentiment.
Short set ups are more prevalent after Thursday’s parabolic run up in many sectors.
We will look to short the semi conductor sector on a gap up as it has rallied into upper channel of a the downtrend on the daily chart in a single day of trading. This move should be unsustainable on a gap up. Will also be looking to short the retail sector as it is rallying into a double top.
LONGS:
SCMR, Sycamore, Long > 6.70 or on pullback between 6.25 – 6.35 range, Next Gen Packet Switching & Mux’ing Equip, $NWX.X
First reversal day on Thursday after multi day beating. Volume picked up nicely on Thursday. On a Fibo retracement to 6.30 area or above 6.70 I like this one long but volume must continue to be strong and the market must cooperate.
PTEN, Patterson Energy, Long > 17.40 or on pullback into support near 17.10 –17.20, Oil Services, $OSX.X
This one consolidated nicely before rallying on good volume to close at the high of the day. Sector is just beginning to recover from multi week sell off.
NE, Nobel Drilling, Long > 31.53, Oil Services, $OSX.X
Stock pulled back to fibo support and consolidated on Thursday after strong run up on Wednesday. Above 31.53 we take out the 200 ma on the 60 min chart and should at least see yesterday’s highs at 31.95. Above here we could make a run at 34.00.
SHORTS:
BSX, Boston Scientific, Short < 17.90, Healthcare Equip. & Supplies, $HCX.X
This stock closed in the lower 40% of its trading range on a strong day in the markets and on strong volume. Below 17.90 there is minor support t 17.81. Will also consider shorting this one on gap up into resistance at 18.25 – 18.65.
BBY, Best Buy, Short on gap up < 69.90, Electronics Stores- Retail, $RLX.X
Rallying into broken up trend channel and double top resistance at 69.90. In this economic climate this one is not likely to break out to new highs after a parabolic move on Thursday.
S, Sears, Short on gap up < 47.80, Department / Discount Stores-Retail, $RLX.X
Rallied to close near the highs of the day on decreasing volume towards a potential double top. Volume on the day increased (ay over day)but compared to last leg up into swing high on 07/19/01 volume is much lower. This is typically how double tops get formed.
The following are all short candidates on a gap up on Light Volume: MXIM >45.00 but < 48.00, LLTC > 43.00 but <47.00, SMH (semi holder) >46.00 but < 49.00, ADI > 48.75 but < 49.25. Other gap up short candidates include: NVDA, ERTS, SUNW, LLTC, LRCX, JBL, BHI & WMT.
Trade Well Today!
Ed, Steve & Deron
General Partners
intradayinvestments.com |
